Source: POLITICO'S MORNING AGRICULTURE, 9/24/18

Trade negotiators have struggled for months over demands by U.S. officials that Canada open up its dairy markets to American producers by expanding import quotas and changing its pricing policy for protein-rich "Class 7" milk. It's perhaps the most confounding issue holding up a three-way North American trade deal. Now, it's starting to look like a deal-breaker, according to a senior Trump administration official Doug writes.

Canada sees it differently: One top Canadian official said negotiators have made headway on the dairy dispute. He said 60 percent of what needs to be resolved is the dispute-resolution mechanism in NAFTA's Chapter 19, which Canada wants to maintain in its current form. A provision in the chapter allows one country to challenge another country's duties if it believes they have been unfairly applied.

Canada also is seeking to be excluded from steel and aluminum tariffs as well as any tariffs resulting from an ongoing inquiry into auto imports on national security grounds.

Canadian Foreign Minister Chrystia Freeland left Washington last week without announcing any breakthroughs — or any firm plans for in-person meetings this week with U.S. Trade Representative Robert Lighthizer. Negotiators are seeking a three-way deal in time for Trump to submit text of a new trade agreement to Congress by Sept. 30.

Keep an eye on NYC: Lighthizer will be in New York this week with Trump. who's set to address the UN General Assembly on Tuesday. Canadian Prime Minister Justin Trudeau will be there with Freeland, too. They're scheduled to speak on a panel Tuesday at the Council on Foreign Relations. Stay tuned for any possible trade talks on the sidelines of the gathering.